SpaceX reports earnings for the first time as a public company after Tuesday’s closing bell, but Wall Street’s attention has already shifted from the excitement surrounding its historic debut to a far more difficult question: can the company justify a valuation that has already shed more than half a trillion dollars in less than two months?

The rocket and satellite company entered the public markets on June 12 in a record $75 billion Nasdaq offering that briefly made Elon Musk the world’s first trillionaire on paper. Shares surged from their $135 debut price, sending SpaceX’s valuation above $2.1 trillion within days before peaking at $225.64 on June 16.

The momentum did not last.

Since then, the stock has fallen almost without interruption. SpaceX closed Friday at $108.37, marking a fourth consecutive weekly decline and reducing its market capitalization to roughly $1.4 trillion. More than $500 billion in shareholder value has disappeared since the post-IPO peak, making it one of the sharpest reversals ever experienced by a marquee American public offering.

Monday’s trading illustrated just how fragile investor sentiment has become. Shares briefly touched another record low of $104.83 before rebounding sharply to around $114.53 by midday, underscoring the volatility that now surrounds every headline involving the company.

For American investors, the decline ranks among the steepest post-IPO reversals in more than a decade. Facebook’s troubled 2012 debut is one of the few comparable examples, but the scale is dramatically different. Facebook’s entire market value after its first trading day was about $100 billion—roughly one-fifth of what SpaceX has erased since reaching its early high.

What Wall Street Wants Tuesday

Against that backdrop, investors will judge far more than whether SpaceX beats quarterly estimates. The central question is whether management can convince Wall Street that its long-term spending, borrowing and expansion plans can eventually generate durable profits.

Analysts expect second-quarter revenue of approximately $6.81 billion, up from $4.7 billion during the first quarter. Consensus forecasts call for an adjusted loss of 24 cents per share and adjusted EBITDA approaching $2 billion.

While those headline numbers matter, many analysts believe the market’s biggest focus will be on the company’s rapidly expanding artificial intelligence infrastructure business.

Only days before the IPO, SpaceX signed a deal with Google reportedly worth $920 million per month to provide AI computing capacity. Anthropic separately contracted for the full capacity of the company’s Colossus 1 data center in Memphis, Tennessee, while Reflection AI signed its own computing agreement.

Those contracts have transformed SpaceX’s revenue profile almost overnight. Investors now want to know whether hosted AI computing is producing meaningful profits—or simply generating impressive revenue while consuming enormous amounts of capital.

Capital spending remains the other major concern.

S&P Global Visible Alpha analyst Melissa Otto projects capital expenditures rising from $48.7 billion this year to $118.4 billion by fiscal 2028. Over the same period, she expects total debt to climb more than fivefold, from $41.7 billion to more than $218 billion.

Those projections reinforce concerns already weighing on the stock. SpaceX continues spending billions of dollars each quarter, carries nearly twice as much debt as cash, and still relies on Starlink as its only consistently profitable business segment.

A New Supply Problem Is About To Arrive

Even a strong earnings report may not eliminate the next challenge facing shareholders.

Rolling lock-up restrictions begin expiring in the coming days, giving early investors their first opportunity to sell shares acquired before the IPO. One key expiration arrives on August 6, potentially adding millions of additional shares to a market that has already struggled to absorb existing selling pressure.

Short sellers have taken full advantage of the decline.

Matthew Unterman, head of research at S3 Partners, estimated bearish investors were sitting on approximately $8.3 billion in paper profits as of Friday. He described the positioning as “among the most aggressive and quickest bearish builds” seen ahead of a first earnings report for a company of this size.

Not everyone on Wall Street has turned negative.

Cantor maintains a $246 price target, arguing earnings could significantly ease investor concerns if management demonstrates that hosted AI computing can become sustainably profitable while outlining a credible funding strategy.

Bernstein also rates the stock a Buy with a $239 target, saying management’s long-term outlook may ultimately matter more than the quarter’s headline numbers.

New Street Research analyst Ben Harwood remains constructive with a $165 target, calling the recent selloff an attractive entry point for long-term investors.

Options markets suggest traders are preparing for a dramatic reaction either way, with implied pricing indicating an earnings move of roughly 14% to 15% after results are released.

Starship And The Cursor Deal

The conference call is unlikely to focus solely on financial results.

Management will almost certainly face questions about Starship after the company acknowledged that a recent booster recovery failed when only some engines ignited during the landing burn before a hard splashdown.

The issue matters because SpaceX’s IPO prospectus warned that failure to make Starship fully reusable and rapidly relaunchable would increase launch costs, slow deployment schedules and require substantially more capital investment. The company has nevertheless maintained that Starship remains on track to begin carrying payloads into orbit later this year.

Executives are also expected to address SpaceX’s planned $60 billion acquisition of AI coding company Cursor, a transaction scheduled to close during the third quarter pending regulatory approval.

The deal represents another major investment beyond the company’s traditional launch and satellite businesses and could draw questions about financing priorities while debt levels continue rising.

Two weeks ago, Musk defended Tesla’s own earnings after higher costs and negative free cash flow pushed that stock lower.

Now he returns to Wall Street with an even bigger challenge.

Tuesday’s earnings report is no longer about celebrating the largest IPO of the year. It is about convincing investors that a company which has already lost more than $500 billion in market value still deserves one of the richest valuations in the world—and providing a roadmap that explains how SpaceX intends to grow into it.

JBizNews Desk | Wall Street

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